The Cardozas failed to defend their case against the council because they persistently lied and could not justify enlisting a Bushey-based development firm to handle the Sixfields revamp.
That is according to judge Simon Barker QC's 68-page judgement against the former Cobblers directors, handed down at the High Court this morning.
Anthony Cardoza was ordered to pay back £2.1 million in personal payments to the council after the judge agreed those funds should have been used to develop Sixfields stadium.
Loan money from the council was also used to develop club chairman David Cardoza's Church Brampton home, the judge found - and the younger Cardoza was ordered to compensate the council to the value of those works.
The judge's summary sets out his reasons for finding in the council favour.
Notably, Mr Barker QC could find no justification for the former Cobblers directors enlisting Bushey-based businessman Howard Grossman and his 1st Land firm to project-manage the Sixfields development in 2013.
A large proportion of the loan money was ploughed into 1st Land Limited and County (Oundle) Limited between 2013 and 2014.
"1st Land was never in a position to carry out building works and appears to have been established to receive and distribute monies drawn down by NTFC under the loans," said the judge.
"Under oral evidence [the Cardozas] were unable to suggest any sensible reason for the appointment of 1st Land as a contractor."
Between 2013 and 2014 the borough council loaned Northampton Town £10.25 million in chunks or 'tranches'.
The money was intended to pay for a revamp of the ground with corporate entertainment boxes, to begin a hotel development and to develop around 30 acres of adjoining land with a conference facility, shops and houses.
The money made from such a development was intended to place the club on a "secure financial footing", Mr Barker QC's judgement reads and would effectively pay the loan back.
But by 2015, the builders Buckingham Group walked off the site at Sixfields after not being paid. The East Stand was left as an empty shell.
Then, in September that year, the Chron revealed that the football club had failed to make even the interest repayments on the loan back to the borough council.
In 2017, the borough council filed papers at the High Court, suing the former directors of NTFC to the tune of around £3 million.
This, it said, was comprised of a series of 'circular' payments Anthony Cardoza received from the County Group firms County (Oundle) Limited and 1st Land Limited during 2013 and 2014 worth £2.05 million - with the addition of £1 million in damages and compensation.
As the football club's largest creditor at the time, the council said this was a deliberate act by the Cardozas to defraud them under the Insolvency Act.
The council said the fact David Cardoza transferred his Chuch Brampton family home Cheriton into his wife Christina's name in July 2015 was an equally deliberate act to hide a realisable asset from his creditors. David Cardoza also continued to take money out of the club he claimed was a 'wage', even when it appeared the Cobblers were insolvent.
The Cardozas claimed that they honestly believed they were owed those funds as part of their directors' loan. It was not disputed that when they transferred their majority share of the club over to Kelvin Thomas in 2015, the balances on their directors' loans accounts was £5.1 million.
In making his conclusion though, the judge pointed heavily to the 'conduct' of both Anthony and David Cardoza in their role as directors.
The papers show that when the borough council was beginning to suspect the loan money was not being used for its intended purpose, David Cardoza 'failed to give satisfactory answers'.
In relation to the 10-day trial last July, Mr Barker QC said Anthony Cardoza showed a "general propensity to tell lies and mislead", pointing out six individual pieces of evidence that he felt were unreliable or untrue.
"Anthony Cardoza's demeanour as a witness was urbane and engaging," said the judge. "However, his demeanour is a front for a person who, at least in business and litigation, is thoroughly untrustworthy and unreliable."
Moving on to son David, the judge said that, like his father, he "believes that lying and suppressing the truth is part and parcel of doing business."
Mr Barker QC said the two men showed a total disregard for the interests of the football club and their duty as directors.
In particular, he pointed to how a Bentley was ordered for Howard Grossman's use through the football club accounts in 2013 - even though the Bushey developer was not an officer for the club.
Neither Cardoza could give a satisfactory account as to why.
The borough council, which is also applying to have its legal costs paid for by the Cardozas, is arguing its case at the High Court this afternoon.